Beyond Long Term Care, There Is Lifecare

The Wall Street Journal recently published an article entitled “Beyond Long Term Care,” which explores the decisions faced by older Americans as they sort through their retirement savings and senior living options.

The article reports that the increasing costs (and decreasing availability) of long term care insurance has pushed many families to consider other options for care such as continuing care retirement communities (CCRCs).

Unlike long term care policies, which typically pay for home care, assisted living or skilled nursing care when a policyholder needs assistance with two or more “activities of daily living” (such as bathing or dressing) – CCRCs offer a range of care from independent or assisted living to 24-hour skilled nursing care.

The article also differentiates between the three CCRC formats:

Type A: A lifecare model in which the monthly fees remain the same for all levels of care. The only financial unknown is how long one will live vs. the future cost of care. (This is the lifecare model in operation at Piper Shores).

Type B: Escalating fees based on level of care, with a limited time discount for additional care.

Type C: Escalating fees based on level of care, but with lower monthly rates for independent living, and small or nonexistent entrance fees.

In conclusion, the article offers two pieces of advice for families considering a CCRC:

  1. Consider all of the costs and all of the savings: “If you are 70 years old and pay $400 a month for long-term-care insurance premiums, you might think you have your long-term-care needs covered,” says Justine Vogel, the chief executive of a New Hampshire CCRC. “But if you are receiving care at home, you would have to keep paying for housing, property tax, utilities and food. Those costs are included in CCRC payments, some of which also can be tax deductible as a medical expense.”
  2. Do your research: Ask for financial statements from communities you are considering, compare with their competitors, and make sure they are financially stable and have a good credit rating.

For more information about lifecare at Piper Shores, see these related articles: